The NRCC mess
I’ve said many times that Republicans can’t demand that Nancy Pelosi clean her House until their own house is in order. Yesterday, the NRCC sent an e-mail detailing a massive fraud scheme by one of its own. Here are the full statement and findings.
Oy:
NRCC Chairman Tom Cole made the following statement and distributed the following update on the current investigation and apparent accounting irregularities:
“This afternoon I took the opportunity to brief the Republican congressional leadership and the NRCC’s Executive Committee on our ongoing investigation of apparent accounting irregularities and to detail for them the informational notice submitted to the FEC earlier today, which reflects an adjusted cash on hand as of January 31, 2008.
“Paramount to my chairmanship is the integrity and success of the NRCC. However, the evidence we have today indicates we have been deceived and betrayed for a number of years by a highly respected and trusted individual. From the moment we learned that bogus financial statements had been submitted to the bank on our behalf, we took decisive and speedy action by contacting the FBI, which opened a criminal investigation.
“It is my goal to be open and candid with the facts of this matter and to assure our members, our supporters and our staff at the NRCC that every effort is being made to prevent such a fraudulent act from happening again.”
Update on Investigation of Apparent Accounting Irregularities
Presented to the NRCC Executive Committee of The National Republican Congressional Committee
March 13, 2008
The following update details the preliminary findings of the investigation undertaken at our request, beginning on January 30, by the law firm Covington & Burling LLP and reflects factual information obtained from PricewaterhouseCoopers, the firm retained by Covington to conduct a forensic investigation of the NRCC’s financial records. We refrained from making extensive public comments until now so as not to compromise the investigation being conducted by the FBI. We understand that the FBI’s investigation has now progressed to a point where such public comment would no longer interfere with the investigation. Accordingly, the NRCC is providing this update on the status of its own internal investigation. It is important to note that this report is preliminary, and that the investigation is ongoing and the information provided here may change and be supplemented when the investigation is completed.
Overview
We learned January 28 that, contrary to prior assurances, no audit of the NRCC’s 2006 financial statements was being conducted. Chris Ward, whose duties included coordinating completion of the NRCC’s annual audit for calendar year 2006, informed the chairman’s office that no audit had been done, after repeated inquiries over a number of months from the NRCC leadership, including the chairman’s office and the head of the NRCC’s oversight committee.
Shortly thereafter, we learned that Ward had apparently fabricated and submitted 2006 financial statements to the NRCC’s bank. We then retained Covington & Burling LLP and, upon their advice, we reported these facts to the FBI, which opened a criminal investigation.
Since then, and as a result of the investigation being conducted, we have learned that the last year for which the NRCC obtained a completed independent audit report was calendar year 2001. That audit was conducted and completed during 2002. It appears that after becoming treasurer in 2003, Ward submitted to the NRCC’s bank and to NRCC leadership bogus audit reports for 2002, 2003, 2004 and 2005. An additional bogus audit was submitted to the NRCC’s bank for 2006.
We terminated Ward’s consulting duties January 28, 2008.
For background:
Ward had served at the committee since November 3, 1995 and as treasurer since 2003, when he became responsible for coordinating the NRCC audits.
Ward stepped down as treasurer in July 2007, but remained as a consultant to the NRCC, with duties that included coordinating completion of the 2006 audit.
When we learned of the apparent irregularities, Chairman Cole directed that an outside firm be retained to conduct an investigation.
Covington & Burling LLP was retained January 30 and has been conducting an internal investigation.
After Covington’s initial review, the firm advised the NRCC to refer the matter to the FBI and to inform the FEC. Covington also retained PricewaterhouseCoopers to conduct a forensic investigation of the NRCC’s financial records.
Contrary to media reports, the FBI has not been to the NRCC office during the course of this investigation nor have they operated out of the NRCC offices.
Unauthorized transfers of funds
Based on analysis conducted to date, it appears likely that over a period of several years Ward made several hundred thousand dollars in unauthorized transfers of NRCC funds to outside committees whose bank accounts he had access to, including joint fundraising committees in which the NRCC participated. He also appears to have made subsequent transfers of several hundred thousand dollars in funds from those outside committees to what appear to be his personal and business bank accounts. Those unauthorized transactions date back to at least 2004. The exact dollar figures are currently a moving target, and as the investigation progresses, it is entirely possible that these figures will change, either by increasing or decreasing. The forensic investigation has also noted numerous instances in which the unauthorized transfers were either not accurately reported, or were not reported at all, on FEC reports.
Additional financial findings
The internal investigation also has determined that there is a discrepancy between the NRCC’s cash on hand as reported and its actual cash on hand over the last several years. The findings are as follows:
At year end 2006, the NRCC’s actual cash on hand was approximately $990,000 less than the amount reported to the FEC.
The actual cash on hand as of the NRCC’s most recent FEC report for January 31, 2008 (filed on February 20, 2008) was $740,000 less than the amount reported to the FEC.
We suspect, but have not yet confirmed, that some of that discrepancy was due to unauthorized transfers of funds.We are filing with the FEC today an informational notice reflecting that as of January 31, 2008, the NRCC’s cash on hand was $5,669,997.24. This notice is based on the best information currently available to the NRCC.
Additionally, we have learned the amount reported as outstanding on the NRCC’s line of credit was $200,000 less than the actual amount owed.
Timing for completion of forensic investigation
We emphasize that this information is preliminary, and is based only on the internal investigative work conducted to date. Forensic investigation work takes significant time. We currently anticipate that this investigation will take an additional 6-8 weeks, though it is possible more time will be needed.
Internal controls
Beginning in January, 2007, Chairman Cole and the NRCC have worked hard to improve and strengthen financial controls. They have reviewed all policies and procedures and are implementing safeguards to prevent such events from occurring in the future.
The Washington Post has more, noting that “Before yesterday, the committee, which raised $49 million in 2007, had not acknowledged that any money was missing.”
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- Don’t wait too long! « Cowardly political musings…
- Michelle Malkin » More trouble for the GOP…and a Republican challenge to Don Young
- NRCC, Ask for Real Feedback » The American Mind
- Michelle Malkin » The NRCC mess revisited: Accounting investigation report released
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I don’t recognize this party anymore. What the *&%! happened to the party that Ronald Reagan and Newt Gingrich built?
Get used to hearing “President Obama” for the next few years, folks.
sometimes we romanticize the past:
reagan admin. officials set records for prosecutions/convictions–resigned in disgrace. the list is long.
management not the gipper’s strength.
Still venting…
At the very least, the GOP used to be good at accounting!
I am feeling better about refusing to support the Republican party financially all the time…my usual response is “When you stop acting like Democrats, come and talk to me again”.
Grrrrr.
And we trust these clowns to govern us?!
You have got to be kidding me.
Politician, thy name is corruption or is it the other way around? Folks, (D) or (R), corruption does not care. Power and money are the problem.
I have been saying for years, fire ALL the politicians and replace them with their secretaries, give them a 100% raise and this country will be running like a well oiled machine in a month on 1 tenth the budget (one fifth if they are moms).
Look at the positive side. At least they rooted the corruption out and are dealing with it. The Democrats would wait until the FBI or another enforcement agency discovered it and then blame the Republicans some how.
Neither party is pure as the driven snow. As long as you have people involved, you’re going to have dishonest and immoral conduct. Is anyone really surprised?
We do not trust these clowns to govern which is why when giving your money to candidates you go GRASSROOTS……give to the conservative candidates directly…ignore these idiotic “old boys” clubs because they are giving your money to people you would never give it to…..it’s time to retake the party from these idiots.
And they wonder why the base no longer supports them? They honestly believe they are the ones to lead the Republican Party into the next century?
Disturbing obviously … however at least the Republicans are trying to clean up some things that have been going on …
Democrats simply sweep everything under the rug as if nothing happened and no one gets relieved of any duties let alone losing their jobs in Congress …
Take a count of the number of people on each side in trouble and what their current status is … big difference depending on which party …
Majority of Republicans resign and leave office (Larry Craig is exception) while Democrats just stay in office …
Corrupt Democrat Judges get impeached and then get elected to Congress and receive standing ovations from their Democrat pals …
Democrats get caught with $90K of a $100K bribe in their freezer and stay in office and it takes years to get them into court on the charges …
Democrats get caught in influence peddling scandals and just brush it off and go on as if nothing happened … See Barbara Boxer (family business military contracts), Nancy Pelosi (SF waterfront projects increasing the value of her family owned property), Harry Reed (many years of questionable land deals), et. al.
This doesn’t include the trail of death that you can attach to names like Kennedy and Clinton …
Bottom line … Republicans also have problems … but at least they usually try to do something about it … more than I can say for Democrats …
As they say, 1 bad apple can spoil the barrel. To get back any integrity, investigations need to continue to root out the corruption, where ever it may be, including leadership of both parties. Our society has gotten to the point where values and morals don’t matter anymore. What “feels good” does.
I stopped contributing when the party began spending like the democrats…
Nice wrong and empty hit piece on Reagan and Gingrich, derel3433!!
I stopped supporting the Republicans when they caved to the democrat party in the 2006 elections. They want my support -> they’re going to have to earn it back, and this might be a first step, but only a first step.
I, too, long for men leading the party the likes of Reagan and Gingrich!!
As if I really needed another reason not to give money to the Republican party.
Soap is right,the old throw them all out but my guy has got to go.The incumbents must be voted out.Both parties are going to cram a huge personel tax increase on most of us.It’s like they can’t wait to do it.You have to stay poor or not work to get ahead.Someone on this site said he would let us know what soup line he was assigned to,I hope he keeps in touch.
The thing that jumps right out at me is that they put the guy in charge of the money in charge of the audits. Talk about having the fox guard the hen house.
The answer is limiting them to two terms each. . . one in office, one in jail.
separation of duties, is one of the SOX mandates.. even if you are a not for profit it is just sound practices. checks and balances, is the old term in accounting. you don’t let the person signing the checks make the checks out, mail them, reconile the bank accounts and audit the books! talk about a fraud waiting to happen.
wow, thank God I have stopped giving money to the republican party. american constitutional party is the party i am moving towards. as the republican party has left me behind to move into the corrupt world of liberalism.
After forty years of debauched Democrat rule of the House, rule that introduced this sort of behavior, I find it hard to wag my finger at the Republicans for merely following the model set for them by the Democrats – especially since that model kept the Dems in power throughout the sixties, seventies, and eighties.
Now I’m not trying to excuse the Republicans, and I want my party to stop this sort of behavior, but after watching the Demos play with the books for decades, I’m not moved to vote out “my guy” as a consequence of mimicry.
Yes, they’ve been acting like Democrats since they took power back in ‘94. They emulated their captors well.
On-my-soap-box #6, no, money and power are not the problem. Money and power in the hands of people of integrity, honor & charactor is safe. It’s what’s in the ‘heart’ of the individual that is either good or bad. Money is amoral. It only floats to the surface what is in a person’s heart.
I prefer to give the benefit of the doubt. From reading the above, seems they are searching for the flaw and the truth. Time will tell.
This is why we are going to lose the White House and both houses this year. Prepare yourselves for 8 years of Democrat rule.
I am paying off as much debt as I can and plan on running on a cash only basis for the next few years.
Yet another example of why the phrase “honest politician” is an oxymoron … if not extinct they are at least on the endangered species list …
In 1994, Newt Gingrich signed the Contract with America and we had balanced budgets, along with the accompanying prosperity, for the rest of the decade. The GOP can’t preach personal responsibility as long as its own fiscal responsibility has gone down the black hole. This means getting back to basics: no more earmarks, no more pork barrel, no more corporate welfare, no more sucking up to lobbyists on legislation, but instead reorienting our economy toward the traditional virtues of thrift and saving for the proverbial rainy day.
Absolutepower corruptsabsolutelyVery sad. Just another reason why our central government was never meant to be large. And being in government was never supposed to be a career.
Actually, they didn’t “build it”. Their attempt to move it to real conservative values was and is now resisted by the Republican Pary Leadership.
The Republican elites in leadership never really liked Reagan and learned nothing from him (how else does a McCain get the party nomination?), but enjoyed what his popularity brought to the Party.
And, no, WE here on this blog and others like it, DO NOT trust these clowns, which is why we are always on their case when they go astray – all too often.
Until the Republican Party leadership starts acting like the party we want it to be, we will continue to be on its case.
The GOP certainly has a multifaceted mess on it’s hands. Seems some of those in the “inner circle” have a taste for stolen money like many of their compadres in the democrap party.
The entire top tier of GOP leadership must be forced out and replaced with true conservatives before we can expect anything to change.
The go-along, get-along powermongers who sell us out on immigration and accomodation with liberals will continue to do so until we dispose of them.
We need to fight back and kill off the political careeers of the so-called “leadership” that lets crap like this happen on their watch.
This is why I’m writing in Newt Gingrich in ‘08. I’ve only knowingly voted for one Democrat in my life and he was family, so that’s the excuse I’m sticking with. I will not knowingly vote for a Democrat and that is McCain.
Obama has done very well running on Newt’s idea of change, but the only problem is he doesn’t address how to change, what to change and why to change. Newt Gingrich does, be it in his Book “Real Change” or his “American Solutions workshops”. http://www.newt.org is a site all should check out. Input your ideas and work together to solve the problems we face.
By the way, Newt has a great tribute to Ronald Reagan that just went up today on the site.
My issue with Newt is that he is great on coming up with ideas, but crap when it comes to execution of the solutions needed.
That’s why he was a poor speaker, and would be a terrible president.
The only hope we have for America is to completely dismantle the Federal Government and rebuild it to the specifications of The Constitution of the United States of America.
Similarly, the only hope for the Republican Party is to completely break it down and rebuild it based on Conservative, ethical standards. As it is now, the Republican Party is little more than a cheap imitation of the Democrat Party.
What, the RNCC can’t figure out which way is up? Big surprise….
IMHO, the RNC (and derivatives) ought to operate a lot more like the NFIB. The NFIB polls its membership on issues (with pro/con discussions) and only if they get a lot of grass roots support will they proceed on the issue. They also track how Congress Critters vote one various issue.
One variant the RNC ought to use is perhaps campaign support ought to be related to how much a Critter supports GOP grass roots issues. Since the leadership doesn’t seem willing to clean house of RINOs, they ought to set up a system that allows the grassroots to take a larger role in leading the party.